Written by Kianna Best on May 5, 2025. Posted in General Interest

Trump’s proposed 100% tariff on foreign films sparks global industry concern

In a move that has sent shockwaves through the global entertainment industry, President Donald Trump announced plans to impose a 100% tariff on all foreign-made films. The policy is framed as a national security measure aimed at revitalising the U.S. film sector, which Trump claims is in "rapid decline" due to foreign subsidies and incentives luring productions overseas.

Image courtesy of Mackenzie Marco by Unsplash

Hollywood’s Global Footprint Under Threat

Trump’s proposed tariff targets films produced outside the U.S., a significant portion of which are co-productions involving American studios and international partners. Major blockbusters like Barbie, Wicked," and Gladiator II have recently been filmed in countries offering attractive tax incentives, such as the UK, Canada, and New Zealand. These incentives have contributed to a nearly 40% decline in U.S.-based film production over the past decade.

The Motion Picture Association (MPA) and other industry stakeholders express concern that the tariffs could disrupt the complex web of international collaborations that underpin modern filmmaking. With American films still dominating global box office sales and generating a USD15.3 billion trade surplus in 2023, critics argue that the tariffs could undermine the very industry they aim to protect.

Economic Repercussions and Market Response

The announcement has already impacted financial markets, with shares of major media companies like Netflix, Disney, and Paramount experiencing sharp declines. Investors fear that increased production costs and potential retaliatory measures from other countries could erode profit margins and disrupt content pipelines.

Moreover, the tariffs could lead to higher costs for imported filmmaking equipment and materials, further straining budgets. While many studios lease equipment domestically, specialised items often sourced from countries like Canada and China may become more expensive, potentially affecting production schedules and overall project viability.

International Backlash and Diplomatic Strains

The global response to Trump's tariff proposal has been swift and critical. Leaders from countries with robust film industries, including Canada, the UK, Australia, and New Zealand, have condemned the move, viewing it as a protectionist policy that could harm international cultural exchange and economic cooperation. Canadian Prime Minister Justin Trudeau has vowed a "forceful and immediate response," highlighting the potential for a broader trade conflict.

In the UK, industry experts warn that the tariffs could deter U.S. studios from filming in Britain, jeopardising the country's thriving film sector and the jobs it supports. The British government may need to enhance its tax incentives to remain competitive and mitigate potential losses.

In response to the proposed tariffs, Adrian Wootton OBE, chief executive of the British Film Commission said:  “While this announcement is clearly concerning, we need to understand the detail surrounding the proposed tariffs. We will be meeting with Government and our industry policy group in the coming days to discuss further. The UK and US have long enjoyed a strong, shared history of film-making, recently celebrating 100 years of creative collaboration and production. We look forward to continuing that for years to come, to our mutual benefit.”

Uncertain Implementation and Industry Outlook

While Commerce Secretary Howard Lutnick has confirmed that the administration is moving swiftly to implement the tariffs, details regarding their enforcement, especially concerning streaming services and digital content, remain unclear. The lack of specificity has left studios and distributors in a state of uncertainty, complicating planning and investment decisions.

Despite the challenges, some industry insiders believe Hollywood can adapt by increasing domestic production and exploring new markets. However, the potential for retaliatory tariffs and the disruption of established international partnerships pose significant risks. As the situation evolves, stakeholders across the film industry will be closely monitoring developments and advocating for policies that support sustainable growth and global collaboration.